Federal Reserve’s primary indicator of inflation data for May released – Check latest numbers

The US index tracking core personal consumption expenditure prices, which excludes food and energy, increased by 0.3% in May, in line with market expectations, slowing from the 0.4% gain in April. The Federal Reserve’s primary indicator of inflation in the US economy, the annual change, increased by 4.6%, a slight decline from 4.7% in April. The PCE price index increased by 0.1% from the previous month and 3.8% from the same time last year, the smallest yearly gain since April 2021, when food and energy costs were factored in.

Compared to a downwardly revised 4.3% increase in April, the personal consumption expenditure price index in the United States increased by 3.8% year-over-year in May 2023, its lowest reading since April 2021. Price increases for both products and services totaled 1.1% and 5.3%, respectively.

While energy prices dropped 13.4%, food prices increased by 5.8%. The PCE price index, the Federal Reserve’s preferred method of measuring inflation, climbed 4.6% from a year ago when food and energy are excluded, undershooting market expectations of 4.7% and 4.7% in April. PCE prices increased by 0.1% and the core index by 0.3% on a monthly basis. The Fed predicted PCE inflation of 3.2% and core PCE inflation of 3.9% for this year in June.

In May 2023, the personal consumption expenditure price index increased 0.1% over the previous month, which was less than the 0.4% increase seen in April. While the cost of commodities decreased by 0.1%, service prices grew by 0.3%. While energy prices fell 3.9%, food prices rose 0.1%. With food and energy excluded, the PCE price index rose by 0.3%.

Compared to an upwardly revised 4.3% increase in April, PCE prices grew 3.8% year over year, the lowest reading since April 2021. The core rate, the Federal Reserve’s preferred inflation indicator, increased 4.6%, exceeding market forecasts of 4.7%.

On the final day of Q2, US stock futures continued to rise as traders hailed declining PCE inflation. Contracts on the Dow Jones rose nearly 100 points, the S&P 500 gained 0.7%, and the Nasdaq 100 added 1%. The favoured inflation measure of the Fed increased by 0.3%, in line with expectations and less than 0.4% in April. Additionally, the headline PCE rate fell to its lowest level in almost two years, while the annual core pace dropped to 4.6%.

Chair Powell promised that interest rates will increase once more this year early in the week. In premarket trading, shares of Nike slid around 3% on a weaker-than-expected quarterly earnings, while Apple shares increased nearly 1% after Citigroup initiated coverage of the firm with a “buy” rating.